| x |   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|---|--------|-----------------------------------------------------------------------------------------------|

|  |   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|----------|--------|------------------------------------------------------------------------------------------|

| California                                                     | 68-0450397                              |
|----------------------------------------------------------------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |

| 195 N. First Street, Dixon, California   | 95620      |
|------------------------------------------|------------|
| (Address of principal executive offices) | (Zip Code) |

| Yes  x | No   ̈ |
|------------------|----------------------|

| Yes  r | No  r |
|------------------|-----------------|

| Large accelerated filer    ̈ | Accelerated filer   ̈ |   Non-accelerated filer   ̈ |   Smaller reporting company x |
|-------------------------------------------------|-------------------------------------|-----------------------------------------------------|-----------------------------------------|

| Yes   ̈ | No  x |
|-----------------------|-----------------|

----

| Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PART I   – Financial Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ITEM I    – Financial Statements (Unaudited) .....................................................................................................................................................................................................................................................3Condensed Consolidated Balance Sheets (Unaudited) .............................................................................................................................................................................................................................3Condensed Consolidated Statements of Operations (Unaudited) ...........................................................................................................................................................................................................4Condensed Consolidated Statement of Stockholders' Equity and Comprehensive Income (Unaudited) ..........................................................................................................................................5Condensed Consolidated Statements of Cash Flows (Unaudited) ..........................................................................................................................................................................................................6Notes to Condensed Consolidated Financial Statements .........................................................................................................................................................................................................................7ITEM 2.   – Management’s Discussion and Analysis of Financial Condition and Results of Operations .............................................................................................................................................24ITEM 3.   – Quantitative and Qualitative Disclosures about Market Risk ....................................................................................................................................................................................................41ITEM 4.   – Controls and Procedures ..................................................................................................................................................................................................................................................................41PART II   – Other Information ..............................................................................................................................................................................................................................................................................41ITEM 1A. – Risk Factors .......................................................................................................................................................................................................................................................................................41ITEM 6.   – Exhibits ................................................................................................................................................................................................................................................................................................41SIGNATURES .........................................................................................................................................................................................................................................................................................................41 |

----

|                                                                                                                                                   |   | March 31,   |    |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
| (in thousands, except share amounts)                                                                                                                   |   | 2010        |    |   | 2009         |   |
|                                                                                                                                                   |   | (unaudited) |    |   |         |   |
| Assets                                                                                                                                                 |   |        |    |   |         |   |
|                                                                                                                                                   |   |        |    |   |         |   |
| Cash and due from banks                                                                                                                                |   | $           | 150,470 |   |         | $      | 147,076 |   |
| Investment securities – available-for-sale                                                                                                       |   |        | 96,865  |   |         |   | 75,868 |   |
| Loans, net of allowance for loan losses of $11,311 at March 31, 2010                                                                                   |   |        |    |   |         |   |   |   |
|    and $11,916 at December 31, 2009                                                                                                     |   |        | 450,581 |   |         |   | 474,378 |   |
| Loans held-for-sale                                                                                                                                    |   |        | 1,601   |   |         |   | 1,640 |   |
| Stock in Federal Home Loan Bank and other equity securities, at cost                                                                                   |   |        | 2,506   |   |         |   | 2,506 |   |
| Premises and equipment, net                                                                                                                            |   |        | 7,214   |   |         |   | 7,397 |   |
| Other Real Estate Owned                                                                                                                                |   |        | 4,262   |   |         |   | 3,518 |   |
| Accrued interest receivable and other assets                                                                                                           |   |        | 33,971  |   |         |   | 35,242 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
|                  Total Assets                                     |   | $           | 747,470 |   |         | $      | 747,625 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                                             |   |        |    |   |         |   |   |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
| Liabilities:                                                                                                                                           |   |        |    |   |         |   |   |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
|          Demand deposits                                                                                  |   | $           | 177,610 |   |         | $      | 179,684 |   |
|          Interest-bearing transaction deposits                                                            |   |        | 133,979 |   |         |   | 133,224 |   |
|          Savings and MMDA's                                                                               |   |        | 194,331 |   |         |   | 186,456 |   |
|          Time, under $100,000                                                                             |   |        | 51,965  |   |         |   | 55,013 |   |
|          Time, $100,000 and over                                                                          |   |        | 93,000  |   |         |   | 97,049 |   |
|                  Total deposits                              |   |        | 650,885 |   |         |   | 651,426 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
|          FHLB Advances and other borrowings                                                               |   |        | 11,829  |   |         |   | 11,813 |   |
|          Accrued interest payable and other liabilities                                                   |   |        | 6,132   |   |         |   | 6,293 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
|                  Total liabilities                                |   |        | 668,846 |   |         |   | 669,532 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
| Stockholders' Equity:                                                                                                                                  |   |        |    |   |         |   |   |   |
|          Preferred stock, par value $0.01 per share; $1,000 per share liquidation                         |   |        |    |   |         |   |   |   |
| preference, 18,500 shares authorized; 17,390 shares issued and                                                                                         |   |        |    |   |         |   |   |   |
| outstanding at March 31, 2010 and December 31, 2009                                                                                                    |   |        | 16,851  |   |         |   | 16,822 |   |
|         Common stock, no par value; 16,000,000 shares authorized;                                              |   |        |    |   |         |   |   |   |
|             9,066,967 shares issued and outstanding at March 31, 2010 and                  |   |        |    |   |         |   |   |   |
|             9,055,137 shares issued and outstanding at December 31, 2009                   |   |        | 62,524  |   |         |   | 62,457 |   |
|         Additional paid in capital                                                                             |   |        | 977     |   |         |   | 977 |   |
|         Accumulated deficit                                                                                    |   |        | (1,959  | )      |         |   | (2,074 | ) |
|         Accumulated other comprehensive income/(loss), net                                                     |   |        | 231     |   |         |   | (89 | ) |
|                  Total stockholders’ equity                 |   |        | 78,624  |   |         |   | 78,093 |   |
|                                                                                                                                                   |   |        |    |   |         |   |   |   |
|                  Total Liabilities and Stockholders’ Equity |   | $           | 747,470 |   |         | $      | 747,625 |   |

----

|                                                                                                                                    |   | Three months   |    |   | Three months   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
|                                                                                                                                    |   | ended          |    |   | ended          |   |
| (in thousands, except per share amounts)                                                                                                |   | March 31, 2010 |    |   | March 31, 2009 |   |
| Interest and Dividend Income:                                                                                                      |   |           |    |   |           |   |
|      Loans                                                                                                     |   | $              | 6,798   |   |           | $      | 7,937 |   |
|      Federal funds sold                                                                              |   |           | — |   |           |   | 19 |   |
|      Due from banks interest bearing accounts                                                                  |   |           | 94      |   |           |   | 31 |   |
|      Investment securities                                                                                |   |           |    |   |           |   |   |   |
|           Taxable                                                                     |   |           | 375     |   |           |   | 194 |   |
|           Non-taxable                                                                 |   |           | 235     |   |           |   | 262 |   |
|                Total interest and dividend income  |   |           | 7,502   |   |           |   | 8,443 |   |
| Interest Expense:                                                                                                                  |   |           |    |   |           |   |   |   |
|      Deposits                                                                                                  |   |           | 1,004   |   |           |   | 1,062 |   |
|      Other borrowings                                                                                     |   |           | 107     |   |           |   | 158 |   |
|                Total interest expense              |   |           | 1,111   |   |           |   | 1,220 |   |
| Net interest income                                                                                                           |   |           | 6,391   |   |           |   | 7,223 |   |
| Provision for  loan losses                                                                                               |   |           | 1,450   |   |           |   | 1,106 |   |
|  Net interest income after provision    for loan losses                          |   |           | 4,941   |   |           |   | 6,117 |   |
| Other operating income:                                                                                                       |   |           |    |   |           |   |   |   |
|      Service charges on deposit accounts                                                   |   |           | 825     |   |           |   | 863 |   |
|      Gains on other real estate owned                                                                     |   |           | 27      |   |           |   | 2 |   |
|      Gains on sales of loans held-for-sale                                                 |   |           | 117     |   |           |   | 174 |   |
|      Investment and brokerage services income                                              |   |           | 244     |   |           |   | 149 |   |
|      Mortgage brokerage income                                                                       |   |           | 8       |   |           |   | 15 |   |
|      Loan servicing income                                                                           |   |           | 272     |   |           |   | 96 |   |
|      Fiduciary activities income                                                                               |   |           | 70      |   |           |   | 98 |   |
|      ATM fees                                                                                             |   |           | 62      |   |           |   | 58 |   |
|      Signature based transaction fees                                                                          |   |           | 173     |   |           |   | 139 |   |
|      Other income                                                                                         |   |           | 205     |   |           |   | 146 |   |
|                Total other operating income   |   |           | 2,003   |   |           |   | 1,740 |   |
| Other operating expenses:                                                                                                     |   |           |    |   |           |   |   |   |
|      Salaries and employee benefits                                                             |   |           | 3,768   |   |           |   | 3,648 |   |
|      Occupancy and equipment                                                                         |   |           | 847     |   |           |   | 998 |   |
|      Data processing                                                                                      |   |           | 448     |   |           |   | 447 |   |
|      Stationery and supplies                                                                         |   |           | 81      |   |           |   | 123 |   |
|      Advertising                                                                                               |   |           | 131     |   |           |   | 161 |   |
|      Directors’ fees                                                                                |   |           | 52      |   |           |   | 52 |   |
|      Other real estate owned expense and write-downs                                                           |   |           | 231     |   |           |   | 724 |   |
|      Other expense                                                                                        |   |           | 1,315   |   |           |   | 1,515 |   |
|                Total other operating expenses |   |           | 6,873   |   |           |   | 7,668 |   |
|                Income before benefit for income taxes   |   |           | 71      |   |           |   | 189 |   |
| Benefit for income taxes                                                                                                 |   |           | (290    | )      |           |   | (264 | ) |
|                                                                                                                                    |   |           |    |   |           |   |   |   |
|                Net  income                         |   | $              | 361     |   |           | $      | 453 |   |
|                                                                                                                                    |   |           |    |   |           |   |   |   |
| Preferred stock dividends and accretion                                                                                                 |   | $              | (246    | )      |           | $      | (51 | ) |
| Net  income available to common          shareholders                       |   | $              | 115     |   |           | $      | 402 |   |
|                                                                                                                                    |   |           |    |   |           |   |   |   |
| Basic income per share                                                                                                        |   | $              | 0.01    |   |           | $      | 0.04 |   |
| Diluted income per share                                                                                                      |   | $              | 0.01    |   |           | $      | 0.04 |   |

----

| (in thousands, except share amounts)                                                                |   |
|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                                |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Additional |   |   |   |   |   | Other |   |   |   |   |
|                                                                                                |   | Preferred Stock |   |   | Common Stock |   |   | Comprehensive |   |   | Paid-in |   |   | (Accumulated |   |   | Comprehensive |   |   |   |   |
|                                                                                                |   | Shares |   |   | Amounts |   |   | Shares |   |   | Amounts |   |   | Income |   |   | Capital |   |   | Deficit) |   |   | Income (Loss) |   |   | Total |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2009                                                                        |   |   | 17,390 |   |   | $ | 16,822 |   |   |   | 9,055,137 |   |   | $ | 62,457 |   |   |   |   |   | $ | 977 |   |   | $ | (2,074 | ) |   | $ | (89 | ) |   | $ | 78,093 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 361 |   |   |   |   |   |   |   | 361 |   |   |   |   |   |   |   | 361 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income,  net of tax:                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized holding gains on securities arising during the current period, net of tax effect of $213 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 320 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total other comprehensive income, net of tax effect of $213                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 320 |   |   |   |   |   |   |   |   |   |   |   | 320 |   |   |   | 320 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 681 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of preferred stock                                                                         |   |   |   |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend on preferred stock                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (217 | ) |   |   |   |   |   |   | (217 | ) |
| Discount accretion on preferred stock                                                               |   |   |   |   |   |   | 29 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (29 | ) |   |   |   |   |   |   | — |   |
| Stock-based compensation and related tax benefits                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 67 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 67 |   |
| Common shares issued, stock options exercised, net of swapped shares                                |   |   |   |   |   |   |   |   |   |   | 11,830 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at March 31, 2010                                                                           |   |   | 17,390 |   |   | $ | 16,851 |   |   |   | 9,066,967 |   |   | $ | 62,524 |   |   |   |   |   |   | $ | 977 |   |   | $ | (1,959 | ) |   | $ | 231 |   |   | $ | 78,624 |   |

----

|                                                                                                                                                                                       |   | (in thousands)                         |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                                                                                                       |   | Three months ended March 31, 2010 |    |   | Three months ended March 31, 2009 |   |
| Cash Flows From Operating Activities                                                                                                                                                       |   |                                   |    |   |   |   |
|           Net Income                                                                                                                     |   | $                                      | 361     |   |   | $ | 453 |   |
|           Adjustments to reconcile net income to net cash provided by                            |   |                                   |    |   |   |   |   |   |
|        operating activities:                                                                                                                       |   |                                   |    |   |   |   |   |   |
|  Depreciation and amortization                                                                                                                                                        |   |                                   | 215     |   |   |   | 244 |   |
|  Provision for loan losses                                                                                                                                                            |   |                                   | 1,450   |   |   |   | 1,106 |   |
|  Stock plan accruals                                                                                                                                                                  |   |                                   | 67      |   |   |   | 94 |   |
|  Gains on sales of other real estate owned                                                                                                                                            |   |                                   | (27     | ) |   |   | (2 | ) |
|  Write-downs on other real estate owned                                                                                                                                               |   |                                   | 144     |   |   |   | 713 |   |
|  Gains on sales of loans held-for-sale                                                                                                                                                |   |                                   | (117    | ) |   |   | (174 | ) |
|  Proceeds from sales of loans held-for-sale                                                                                                                                           |   |                                   | 9,614   |   |   |   | 31,392 |   |
|  Originations of loans held-for-sale                                                                                                                                                  |   |                                   | (9,458  | ) |   |   | (34,185 | ) |
|           Changes in assets and liabilities:                                                                                             |   |                                   |    |   |   |   |   |   |
|  Increase in accrued interest receivable and other assets                                                                                                                             |   |                                   | 1,058   |   |   |   | 1,776 |   |
|  Decrease in accrued interest payable and other liabilities                                                                                                                           |   |                                   | (161    | ) |   |   | (62 | ) |
|                     Net cash provided by operating activities      |   |                                   | 3,146   |   |   |   | 1,355 |   |
|                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Cash Flows From Investing Activities                                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|           Net increase in investment securities                                                                           |   |                                   | (20,464 | ) |   |   | (5,496 | ) |
|           Net decrease in loans                                                                                                     |   |                                   | 21,474  |   |   |   | 35,279 |   |
|           Proceeds from the sale of other real estate owned                                                                              |   |                                   | 12      |   |   |   | — |   |
|           Purchases of premises and equipment, net                                                              |   |                                   | (32     | ) |   |   | (331 | ) |
|                     Net cash provided by investing activities                |   |                                   | 990     |   |   |   | 29,452 |   |
|                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Cash Flows From Financing Activities                                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|           Net (decrease) increase in deposits                                                                                  |   |                                   | (541    | ) |   |   | 4,078 |   |
| Proceeds from issuance of preferred stock                                                                                                                                                  |   |                                   | — |   |   |   | 16,726 |   |
| Proceeds from issuance of common stock warrants                                                                                                                                            |   |                                   | — |   |   |   | 664 |   |
|           Net increase (decrease) in FHLB advances and other borrowings                                              |   |                                   | 16      |   |   |   | (4,278 | ) |
|           Cash dividends paid on preferred stock                                                                                         |   |                                   | (217    | ) |   |   | — |   |
|           Cash dividends paid                                                                                                  |   |                                   | — |   |   |   | (5 | ) |
|                     Net cash (used) in provided by financing activities |   |                                   | (742    | ) |   |   | 17,185 |   |
|                                                                                                                                                                             |   |                                   |    |   |   |   |   |   |
| Net Increase in Cash and Cash Equivalents                                                                                                                         |   |                                   | 3,394   |   |   |   | 47,992 |   |
| Cash and Cash Equivalents, beginning of period                                                                                                                    |   |                                   | 147,076 |   |   |   | 66,010 |   |
| Cash and Cash Equivalents, end of period                                                                                                                     |   | $                                      | 150,470 |   |   | $ | 114,002 |   |
|                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:                                                                                                                |   |                                   |    |   |   |   |   |   |
| Cash paid during the period for:                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|                     Interest                                                           |   | $                                      | 1,148   |   |   | $ | 1,260 |   |
|                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Supplemental disclosures of non-cash investing and financing activities:                                                                                |   |                                   |    |   |   |   |   |   |
| Preferred stock dividend payable and accretion                                                                                                                                             |   | $                                      | 140     |   |   | $ | 51 |   |
|    Transfer of loans held-for-investment to other real estate owned                                                                                                         |   | $                                      | 888     |   |   |   | — |   |
|    Stock dividend distributed                                                                                                                                     |   |                                   | — |   |   | $ | 2,249 |   |
|    Unrealized holding gains (losses) on available for sale securities                                                                                                       |   | $                                      | 320     |   |   | $ | (48 | ) |

----

| 1. | BASIS OF PRESENTATION |
|----|-----------------------|

----

|                         |   | (in thousands)              |   |
|------------------------------|--------|-----------------------------|--------|
|                         |   |                        |   |   |   |   |
|                         |   | Three months endedMarch 31, |   |   | Year ended December 31, |   |
|                         |   | 2010                        |   |   | 2009 |   |   | 2009 |   |
| Balance, beginning of period |   | $                           | 11,916 |   |   | $ | 14,435 |   |   | $ | 14,435 |   |
| Provision for loan losses    |   |                        | 1,450  |   |   |   | 1,106 |   |   |   | 10,489 |   |
| Loan charge-offs             |   |                        | (2,116 | ) |   |   | (1,570 | ) |   |   | (14,293 | ) |
| Loan recoveries              |   |                        | 61     |   |   |   | 492 |   |   |   | 1,285 |   |
| Balance, end of period       |   | $                           | 11,311 |   |   | $ | 14,463 |   |   | $ | 11,916 |   |

----

| 3. | MORTGAGE OPERATIONS |
|----|---------------------|

|                                                  |   | (in thousands)    |   |
|-------------------------------------------------------|--------|-------------------|--------|
|                                                  |   | December 31, 2009 |   |   | Additions |   |   | Reductions |   |   | March 31, 2010 |   |
|                                                  |   |              |   |   |   |   |   |   |   |   |   |   |
| Mortgage servicing rights                             |   | $                 | 1,550  |   |   | $ | 126 |   |   | $ | 86 |   |   | $ | 1,590 |   |
| Valuation allowance                                   |   |              | (277   | ) |   |   | — |   |   |   | (110 | ) |   |   | (167 | ) |
| Mortgage servicing rights, net of valuation allowance |   | $                 | 1,273  |   |   | $ | 126 |   |   | $ | (24 | ) |   | $ | 1,423 |   |
|                                                  |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (in thousands, except share and earnings)           |   |
|-----------------------------------------------------|--------|
|                                                |   | Three months ended |   |
|                                                |   | March 31, |   |
|                                                |   | 2010 |   |   | 2009 |   |
| Basic earnings per share:                           |   |   |   |   |   |   |
| Net income                                          |   | $ | 361 |   |   | $ | 453 |   |
| Preferred stock dividend and accretion              |   | $ | (246 | ) |   | $ | (51 | ) |
| Net income available to common shareholders         |   | $ | 115 |   |   | $ | 402 |   |
|                                                |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding          |   |   | 9,007,417 |   |   |   | 8,964,482 |   |
| Basic EPS                                           |   | $ | 0.01 |   |   | $ | 0.04 |   |
|                                                |   |   |   |   |   |   |   |   |
| Diluted earnings per share:                         |   |   |   |   |   |   |   |   |
| Net income                                          |   | $ | 361 |   |   | $ | 453 |   |
| Preferred stock dividend and accretion              |   | $ | (246 | ) |   | $ | (51 | ) |
| Net income available to common shareholders         |   | $ | 115 |   |   | $ | 402 |   |
|                                                |   |   |   |   |   |   |   |   |
| Weighted average common shares outstanding          |   |   | 9,007,417 |   |   |   | 8,924,482 |   |
|                                                |   |   |   |   |   |   |   |   |
| Effect of dilutive options                          |   |   | 956 |   |   |   | 26,407 |   |
|                                                |   |   |   |   |   |   |   |   |
| Adjusted weighted average common shares outstanding |   |   | 9,008,373 |   |   |   | 8,990,889 |   |
| Diluted EPS                                         |   | $ | 0.01 |   |   | $ | 0.04 |   |

----

|                                                  |   | Number of Shares |    |   | Weighted Average Exercise Price |   |    | Aggregate Intrinsic Value |   |   | Weighted Average Remaining Contractual Term (in years) |   |
|-------------------------------------------------------|--------|------------------|---------|--------|---------------------------------|--------|---------|---------------------------|--------|--------|-------------------------------------------------------------|--------|
| Options outstanding at Beginning of  Period |   |             | 514,807 |   |                            | $      | 11.27   |                      |   |   |                                                        |   |   |   |
|                                                  |   |             |    |   |                            |   |    |                      |   |   |                                                        |   |   |   |
|    Granted                             |   |             | 17,500  |   |                            |   | 4.25    |                      |   |   |                                                        |   |   |   |
|                                                  |   |             |    |   |                            |   |    |                      |   |   |                                                        |   |   |   |
|    Cancelled / Forfeited               |   |             | (7,120  | )      |                            |   | 3.88    |                      |   |   |                                                        |   |   |   |
|                                                  |   |             |    |   |                            |   |    |                      |   |   |                                                        |   |   |   |
|    Exercised                           |   |             | — |   |                            |   | — |                      |   |   | —                                                     |   |   |   |   |
|                                                  |   |             |    |   |                            |   |    |                      |   |   |                                                        |   |   |   |   |
| Options outstanding at End of Period                  |   |             | 525,187 |   |                            | $      | 11.18   |                      |   | $      | 14,320                                                      |   |   |   | 4.10 |   |
|                                                  |   |             |    |   |                            |   |    |                      |   |   |                                                        |   |   |   |   |   |
| Exercisable (vested) at End of Period                 |   |             | 483,511 |   |                            | $      | 11.18   |                      |   | $      | 1,000                                                       |   |   |   | 3.71 |   |

|                            |   | Three Months Ended |   |
|---------------------------------|--------|--------------------|--------|
|                            |   | March 31, 2010     |   |
|  Risk Free Interest Rate   |   |               | 2.44   | % |
|                            |   |               |   |   |
|  Expected Dividend Yield   |   |               | 0      | % |
|                            |   |               |   |   |
|  Expected Life in Years    |   |               | 5      |   |
|                            |   |               |   |   |
|  Expected Price Volatility |   |               | 48.12  | % |

----

|                                                  |   | Number of Shares |    |   | Weighted Average Grant-Date Fair Value |   |    | Aggregate Intrinsic Value |   | Weighted Average Remaining Contractual Term            (in years) |
|-------------------------------------------------------|--------|------------------|---------|--------|----------------------------------------|--------|---------|---------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------|
| Options outstanding at Beginning of  Period |   |             | 35,817  |   |                                   | $      | 13.20   |                      |   |                                                                                                                          |   |   |
|                                                  |   |             |    |   |                                   |   |    |                      |   |                                                                                                                          |   |   |
|    Granted                             |   |             | 12,050  |   |                                   | $      | 4.25    |                      |   |                                                                                                                          |   |   |
|                                                  |   |             |    |   |                                   |   |    |                      |   |                                                                                                                          |   |   |
|    Cancelled / Forfeited               |   |             | (220    | )      |                                   | $      | 14.79   |                      |   |                                                                                                                          |   |   |
|                                                  |   |             |    |   |                                   |   |    |                      |   |                                                                                                                          |   |   |
|    Exercised/Released/Vested           |   |             | — |   |                                   |   | — |                      |   |                                                                                                                          | — |   |   |
|                                                  |   |             |    |   |                                   |   |    |                      |   |                                                                                                                          |   |   |   |
| Options outstanding at End of Period                  |   |             | 47,647  |   |                                   | $      | 10.93   |                      |   | $                                                                                                                             | 232,994 |   |   8.42 |
|                                                  |   |             |    |   |                                   |   |    |                      |   |                                                                                                                          |   |   |   |

----

|                            |   | Three Months Ended |   |
|---------------------------------|--------|--------------------|--------|
|                            |   | March 31, 2010     |   |
|  Risk Free Interest Rate   |   |               | 0.29   | % |
|                            |   |               |   |   |
|  Expected Dividend Yield   |   |               | 0.00   | % |
|                            |   |               |   |   |
|  Expected Life in Years    |   |               | 1.00   |   |
|                            |   |               |   |   |
|  Expected Price Volatility |   |               | 30.00  | % |

----

|                                    |   | Three months ended March 31, |   |
|-----------------------------------------|--------|------------------------------|--------|
|                                    |   | 2010                         |   |   | 2009 |   |
| Components of Net Periodic Benefit Cost |   |                         |   |   |   |   |
| Service Cost                            |   | $                            | 27,726 |   |   | $ | 3,990 |   |
| Interest  Cost                |   |                         | 30,551 |   |   |   | 26,418 |   |
| Amortization of Plan Gain               |   |                         | (3,748 | ) |   |   | (8,180 | ) |
| Amortization of prior service cost      |   |                         | 21,821 |   |   |   | 21,821 |   |
| Net periodic benefit cost               |   | $                            | 76,350 |   |   | $ | 44,049 |   |

----

|                                    |   | Three months ended March 31, |   |
|-----------------------------------------|--------|------------------------------|--------|
|                                    |   | 2010                         |   |   | 2009 |   |
| Components of Net Periodic Benefit Cost |   |                         |   |   |   |   |
| Service Cost                            |   | $                            | 8,836  |   |   | $ | 11,088 |   |
| Interest  Cost                |   |                         | 8,267  |   |   |   | 7,921 |   |
| Net periodic benefit cost               |   | $                            | 17,103 |   |   | $ | 19,009 |   |

----

|   | Level 1  |   | Valuation is based upon quoted prices for identical instruments traded in active markets.                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|---------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Level 2  |   | Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data.                                                                                                                                                                    |
|   |          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Level 3  |   | Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market.  These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.  Valuation techniques include use of option pricing models, discounted cash flow models, and similar techniques and include management judgment and estimation which may be significant. |

----

|                                           |   |           |   |   |    |   |    |    |   |   |    |   |
|------------------------------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|---------|--------|
|                                           |   | (in thousands) |   |
| March 31, 2010                                 |   | Total          |   |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |
| U.S. Treasury securities                       |   | $              | 252    |   |    | $      | 252     |    |   | $      | — |   |   | $ | — |   |
| Securities of U.S. government                  |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
|    agencies and corporations    |   |           | 26,403 |   |    |   | 26,403  |    |   |   | — |   |   |   | — |   |
| Obligations of states and                      |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
|     political subdivisions |   |           | 23,520 |   |    |   | — |    |   |   | 23,520  |   |   |   | — |   |
| Mortgage-backed securities                     |   |           | 46,690 |   |    |   | — |    |   |   | 46,690  |   |   |   | — |   |
|                                           |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
| Total investments at fair value                |   | $              | 96,865 |   |    | $      | 26,655  |    |   | $      | 70,210  |   |   | $ | — |   |
|                                           |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |

|                                           |   |           |   |   |    |   |    |    |   |   |    |   |
|------------------------------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|---------|--------|
|                                           |   | (in thousands) |   |
| December 31, 2009                              |   | Total          |   |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |
| U.S. Treasury securities                       |   | $              | 253    |   |    | $      | 253     |    |   | $      | — |   |   | $ | — |   |
| Securities of U.S. government                  |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
|    agencies and corporations    |   |           | 4,335  |   |    |   | 4,335   |    |   |   | — |   |   |   | — |   |
| Obligations of states and                      |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
|     political subdivisions |   |           | 23,416 |   |    |   | — |    |   |   | 23,416  |   |   |   | — |   |
| Mortgage-backed securities                     |   |           | 47,864 |   |    |   | — |    |   |   | 47,864  |   |   |   | — |   |
|                                           |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |
| Total investments at fair value                |   | $              | 75,868 |   |    | $      | 4,588   |    |   | $      | 71,280  |   |   | $ | — |   |
|                                           |   |           |   |   |    |   |    |    |   |   |    |   |   |   |   |   |

----

|                       |   |           |   |   |    |   |    |    |   |   |    |   |   |               |   |
|----------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|---------|--------|--------|--------------------|--------|
|                       |   | (in thousands) |   |
| March 31, 2010             |   | Total          |   |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |   | Total gains/losses |   |
| Impaired loans             |   | $              | 2,740  |   |    | $      | — |    |   | $      | — |   |   | $                  | 2,740  |   |   | $ | (1,099 | ) |
| Other real estate owned    |   |           | 1,861  |   |    |   | — |    |   |   | — |   |   |               | 1,861  |   |   |   | (204 | ) |
| Loan servicing rights      |   |           | 1,423  |   |    |   | — |    |   |   | — |   |   |               | 1,423  |   |   |   | 271 |   |
|                       |   |           |   |   |    |   |    |    |   |   |    |   |   |               |   |   |   |   |   |   |
| Total assets at fair value |   | $              | 6,024  |   |    | $      | — |    |   | $      | — |   |   | $                  | 6,024  |   |   | $ | (1,032 | ) |

|                       |   |           |   |   |    |   |    |    |   |   |    |   |   |               |   |
|----------------------------|--------|----------------|--------|--------|---------|--------|---------|---------|--------|--------|---------|--------|--------|--------------------|--------|
|                       |   | (in thousands) |   |
| December 31, 2009          |   | Total          |   |   | Level 1 |   |    | Level 2 |   |   | Level 3 |   |   | Total gains/losses |   |
| Impaired loans             |   | $              | 8,804  |   |    | $      | — |    |   | $      | — |   |   | $                  | 8,804  |   |   | $ | (6,229 | ) |
| Other real estate owned    |   |           | 3,518  |   |    |   | — |    |   |   | — |   |   |               | 3,518  |   |   |   | (1,545 | ) |
| Loan servicing rights      |   |           | 1,273  |   |    |   | — |    |   |   | — |   |   |               | 1,273  |   |   |   | 779 |   |
|                       |   |           |   |   |    |   |    |    |   |   |    |   |   |               |   |   |   |   |   |   |
| Total assets at fair value |   | $              | 13,595 |   |    | $      | — |    |   | $      | — |   |   | $                  | 13,595 |   |   | $ | (6,995 | ) |

----

----

----

|                                                |   | March 31, 2010  |    |   | December 31, 2009 |   |
|-----------------------------------------------------|--------|-----------------|---------|--------|-------------------|--------|
| (in thousands)                                      |   | Carrying amount |    |   | Fairvalue         |   |   | Carrying amount |   |   | Fairvalue |   |
|                                                |   |            |    |   |              |   |   |   |   |   |   |   |
| Financial assets:                                   |   |            |    |   |              |   |   |   |   |   |   |   |
| Cash and federal funds sold                         |   | $               | 150,470 |   |              | $      | 150,470 |   |   | $ | 147,076 |   |   | $ | 147,076 |   |
| Investment securities                               |   |            | 96,865  |   |              |   | 96,865 |   |   |   | 75,868 |   |   |   | 75,868 |   |
| Other equity securities                             |   |            | 2,506   |   |              |   | 2,506 |   |   |   | 2,506 |   |   |   | 2,506 |   |
| Loans:                                              |   |            |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Net loans                                           |   |            | 450,581 |   |              |   | 453,908 |   |   |   | 474,378 |   |   |   | 476,485 |   |
| Loans held-for-sale                                 |   |            | 1,601   |   |              |   | 1,612 |   |   |   | 1,640 |   |   |   | 1,652 |   |
| Financial liabilities:                              |   |            |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                            |   |            | 650,885 |   |              |   | 633,303 |   |   |   | 651,426 |   |   |   | 632,322 |   |
| FHLB advances and other   borrowings |   |            | 11,829  |   |              |   | 12,270 |   |   |   | 11,813 |   |   |   | 12,260 |   |

|                                |   | March 31, 2010  |    |   | December 31, 2009 |   |
|-------------------------------------|--------|-----------------|---------|--------|-------------------|--------|
| (in thousands)                      |   | Contract amount |    |   | Fairvalue         |   |   | Contract amount |   |   | Fairvalue |   |
|                                |   |            |    |   |              |   |   |   |   |   |   |   |
| Unrecognized financial instruments: |   |            |    |   |              |   |   |   |   |   |   |   |
| Commitments to extend credit        |   | $               | 190,873 |   |              | $      | 1,432 |   |   | $ | 191,589 |   |   | $ | 1,437 |   |
| Standby letters of credit           |   |            | 3,511   |   |              |   | 35 |   |   |   | 3,572 |   |   |   | 36 |   |

----

| (in thousands)                                          |   | Amortized cost |   |   | Unrealized gains |   |    | Unrealized losses |   |   | Estimated market value |   |
|---------------------------------------------------------|--------|----------------|--------|--------|------------------|--------|---------|-------------------|--------|--------|------------------------|--------|
|                                                    |   |           |   |   |             |   |    |              |   |   |                   |   |
| Investment securities available-for-sale:               |   |           |   |   |             |   |    |              |   |   |                   |   |
| U.S. Treasury securities                                |   | $              | 252    |   |             | $      | — |              |   | $      | —                |   |   | $ | 252 |   |
| Securities of U.S. government agencies and corporations |   |           | 26,458 |   |             |   | 13      |              |   |   | (68                    | )      |   |   | 26,403 |   |
| Obligations of states and political subdivisions        |   |           | 23,369 |   |             |   | 319     |              |   |   | (168                   | )      |   |   | 23,520 |   |
| Mortgage-backed securities                              |   |           | 46,102 |   |             |   | 605     |              |   |   | (17                    | )      |   |   | 46,690 |   |
|                                                    |   |           |   |   |             |   |    |              |   |   |                   |   |   |   |   |   |
| Total debt securities                                   |   | $              | 96,181 |   |             | $      | 937     |              |   | $      | (253                   | )      |   | $ | 96,865 |   |

| (in thousands)                                          |   | Amortized cost |   |   | Unrealized gains |   |    | Unrealized losses |   |   | Estimated market value |   |
|---------------------------------------------------------|--------|----------------|--------|--------|------------------|--------|---------|-------------------|--------|--------|------------------------|--------|
|                                                    |   |           |   |   |             |   |    |              |   |   |                   |   |
| Investment securities available-for-sale:               |   |           |   |   |             |   |    |              |   |   |                   |   |
| U.S. Treasury securities                                |   | $              | 253    |   |             | $      | — |              |   | $      | —                |   |   | $ | 253 |   |
| Securities of U.S. government agencies and corporations |   |           | 4,353  |   |             |   | — |              |   |   | (18                    | )      |   |   | 4,335 |   |
| Obligations of states and political subdivisions        |   |           | 23,374 |   |             |   | 308     |              |   |   | (266                   | )      |   |   | 23,416 |   |
| Mortgage-backed securities                              |   |           | 47,737 |   |             |   | 213     |              |   |   | (86                    | )      |   |   | 47,864 |   |
|                                                    |   |           |   |   |             |   |    |              |   |   |                   |   |   |   |   |   |
| Total debt securities                                   |   | $              | 75,717 |   |             | $      | 521     |              |   | $      | (370                   | )      |   | $ | 75,868 |   |

| (in thousands)                         |   | Amortizedcost |   |   | Estimated market value |   |
|----------------------------------------|--------|---------------|--------|--------|------------------------|--------|
|                                   |   |          |   |   |                   |   |
| Due in one year or less                |   | $             | 21,233 |   |                   | $      | 21,218 |   |
| Due after one year through five years  |   |          | 53,803 |   |                   |   | 54,420 |   |
| Due after five years through ten years |   |          | 3,542  |   |                   |   | 3,541 |   |
| Due after ten years                    |   |          | 17,603 |   |                   |   | 17,686 |   |
|                                   |   |          |   |   |                   |   |   |   |
|                                   |   | $             | 96,181 |   |                   | $      | 96,865 |   |

----

|                                                                                                  |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|-------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
| (in thousands)                                                                                        |   | Fair Value          |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Securities of U.S.    government agencies    and corporations |   |                | 19,032 |   |              |   | (68    | )          |   |   | — |   |   |   | — |   |   |   | 19,032 |   |   |   | (68 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions                                                      |   |                | 3,263  |   |              |   | (64    | )          |   |   | 1,968 |   |   |   | (104 | ) |   |   | 5,231 |   |   |   | (168 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                                            |   |                | 3,544  |   |              |   | (17    | )          |   |   | — |   |   |   | — |   |   |   | 3,544 |   |   |   | (17 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                 |   | $                   | 25,839 |   |              | $      | (150   | )          |   | $ | 1,968 |   |   | $ | (104 | ) |   | $ | 27,807 |   |   | $ | (253 | ) |

|                                                                                                  |   | Less than 12 months |   |   | 12 months or more |   |   | Total      |   |
|-------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
| (in thousands)                                                                                        |   | Fair Value          |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |   | Fair Value |   |   | Unrealized losses |   |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Securities of U.S.    government agencies    and corporations |   |                | 3,332  |   |              |   | (18    | )          |   |   | — |   |   |   | — |   |   |   | 3,332 |   |   |   | (18 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions                                                      |   |                | 5,624  |   |              |   | (154   | )          |   |   | 951 |   |   |   | (112 | ) |   |   | 6,575 |   |   |   | (266 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                                                            |   |                | 16,290 |   |              |   | (86    | )          |   |   | — |   |   |   | — |   |   |   | 16,290 |   |   |   | (86 | ) |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                  |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                                 |   | $                   | 25,246 |   |              | $      | (258   | )          |   | $ | 951 |   |   | $ | (112 | ) |   | $ | 26,197 |   |   | $ | (370 | ) |

----

| ·   | Our business objectives, strategies and initiatives, our organizational structure, the growth of our business and our competitive position |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our assessment of significant factors and developments that have affected or may affect our results |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | Pending and recent legal and regulatory actions, and future legislative and regulatory developments, including the effects of legislation and governmental measures introduced in response to the financial crises affecting the banking system, financial markets and the U.S. economy |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Regulatory controls and processes and their impact on our business |
|--------------------|--------------------------------------------------------------------|

| ·   | The costs and effects of legal actions |
|--------------------|----------------------------------------|

| ·   | Our regulatory capital requirements |
|--------------------|-------------------------------------|

| ·   | We do not anticipate paying a cash dividend in the foreseeable future |
|--------------------|-----------------------------------------------------------------------|

| ·   | Credit quality and provision for credit losses |
|--------------------|------------------------------------------------|

| ·   | Our allowances for credit losses, including the conditions we consider in determining the unallocated allowance and our portfolio credit quality, underwriting standards, and risk grade |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our assessment of economic conditions and trends and credit cycles and their impact on our business |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | The impact of changes in interest rates and our strategy to manage our interest rate risk profile |
|--------------------|---------------------------------------------------------------------------------------------------|

| ·   | Loan portfolio composition and risk grade trends, expected charge offs, delinquency rates and our underwriting standards |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The Company believes that the Bank’s deposit base does not involve any undue concentration levels from one or a few major depositors |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our liquidity position |
|--------------------|------------------------|

| ·   | Critical accounting policies and estimates, the impact or anticipated impact of recent accounting pronouncements or change in accounting principles |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Expected rates of return, yields and projected results |
|--------------------|--------------------------------------------------------|

----

----

|   |              (in thousands, except per share and percentage) |
|--------|--------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                     |   |   |   |   |   |   |
|   |                                                                                                                     |   | Three months |   |   | Three months |   |
|   |                                                                                                                     |   | ended |   |   | ended |   |
|   |                                                                                                                     |   | March 31, 2010 |   |   | March 31, 2009 |   |
|   |                                                                                                                     |   |   |   |   |   |   |
|   | For the Period:                                                                                                          |   |   |   |   |   |   |
|   |                                                                                                                     |   |   |   |   |   |   |
|   |     Net Income                                                                                       |   | $ | 361 |   |   | $ | 453 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |     Basic Earnings Per Common Share*                                                                 |   | $ | 0.01 |   |   | $ | 0.04 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |     Diluted Earnings Per Common Share*                                                               |   | $ | 0.01 |   |   | $ | 0.04 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   | At Period End:                                                                                                           |   |   |   |   |   |   |   |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |       Total Assets                                                                         |   |   | 747,470 |   |   |   | 688,424 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |       Total Loans, Net (including loans held-for-sale)                                     |   |   | 452,182 |   |   |   | 485,742 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |      Total Investment Securities                                                                |   |   | 96,865 |   |   |   | 47,522 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |      Total Deposits                                                                             |   |   | 650,885 |   |   |   | 588,796 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   |       Loan-To-Deposit Ratio                                                                |   |   | 69.5 |   |   |   | 82.5 |   |
|   |                                                                                                                     |   |   |   |   |   |   |   |   |
|   | *Adjusted for stock dividends                                                                                            |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                            |   | Three months ended |    |   | Three months ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|
|                                                                                                                                                                                                                                                                                                                            |   | March 31, 2010     |    |   | March 31, 2009     |   |
|                                                                                                                                                                                                                                                                                                                            |   | Average            |    |   |               |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                                                                                                                                                                                                                            |   | Balance            |    |   | Interest           |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Assets                                                                                                                                                                                                                                                                                                                          |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                                                                                                                                                                                                                                                                        |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                                                                                                                                                                                                                                                                                                                       |   | $                  | 461,956 |   |               | $      | 6,798 |   |   |   | 5.97 | % |   | $ | 498,384 |   |   | $ | 7,937 |   |   |   | 6.46 | % |
| Federal funds sold                                                                                                                                                                                                                                                                                                              |   |               | — |   |               |   | — |   |   |   | — |   |   |   | 53,993 |   |   |   | 19 |   |   |   | 0.14 | % |
| Interest bearing due from banks                                                                                                                                                                                                                                                                                                 |   |               | 144,621 |   |               |   | 94 |   |   |   | 0.26 | % |   |   | 2,501 |   |   |   | 31 |   |   |   | 5.03 | % |
| Investment securities, taxable                                                                                                                                                                                                                                                                                                  |   |               | 60,456  |   |               |   | 375 |   |   |   | 2.52 | % |   |   | 17,191 |   |   |   | 194 |   |   |   | 4.58 | % |
| Investment securities, non-taxable  (2)                                                                                                                                                                                                                                                                               |   |               | 22,626  |   |               |   | 235 |   |   |   | 4.21 | % |   |   | 25,013 |   |   |   | 262 |   |   |   | 4.25 | % |
| Other interest earning assets                                                                                                                                                                                                                                                                                                   |   |               | 2,506   |   |               |   | — |   |   |   | — |   |   |   | 2,311 |   |   |   | — |   |   |   | — |   |
| Total interest-earning assets                                                                                                                                                                                                                                                                                                   |   |               | 692,165 |   |               |   | 7,502 |   |   |   | 4.40 | % |   |   | 599,393 |   |   |   | 8,443 |   |   |   | 5.71 | % |
| Non-interest-earning assets:                                                                                                                                                                                                                                                                                                    |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                                                                                                                                                                                                                                                                                         |   |               | 14,277  |   |               |   |   |   |   |   |   |   |   |   | 39,181 |   |   |   |   |   |   |   |   |   |
| Premises and equipment, net                                                                                                                                                                                                                                                                                                     |   |               | 7,340   |   |               |   |   |   |   |   |   |   |   |   | 8,366 |   |   |   |   |   |   |   |   |   |
| Other real estate owned                                                                                                                                                                                                                                                                                                         |   |               | 3,654   |   |               |   |   |   |   |   |   |   |   |   | 4,339 |   |   |   |   |   |   |   |   |   |
| Accrued interest receivable and other assets                                                                                                                                                                                                                                                                                    |   |               | 34,208  |   |               |   |   |   |   |   |   |   |   |   | 26,707 |   |   |   |   |   |   |   |   |   |
| Total average assets                                                                                                                                                                                                                                                                                                            |   |               | 751,644 |   |               |   |   |   |   |   |   |   |   |   | 677,986 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                            |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders’ Equity:                                                                                                                                                                                                                                                                                     |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                                                                                                                                   |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction deposits                                                                                                                                                                                                                                                                                           |   |               | 135,981 |   |               |   | 114 |   |   |   | 0.34 | % |   |   | 124,093 |   |   |   | 176 |   |   |   | 0.58 | % |
| Savings and MMDA’s                                                                                                                                                                                                                                                                                                        |   |               | 194,044 |   |               |   | 344 |   |   |   | 0.72 | % |   |   | 163,404 |   |   |   | 283 |   |   |   | 0.70 | % |
| Time, under $100,000                                                                                                                                                                                                                                                                                                            |   |               | 53,212  |   |               |   | 159 |   |   |   | 1.21 | % |   |   | 58,879 |   |   |   | 239 |   |   |   | 1.65 | % |
| Time, $100,000 and over                                                                                                                                                                                                                                                                                                         |   |               | 95,091  |   |               |   | 387 |   |   |   | 1.65 | % |   |   | 70,951 |   |   |   | 364 |   |   |   | 2.08 | % |
| FHLB advances and other borrowings                                                                                                                                                                                                                                                                                              |   |               | 11,798  |   |               |   | 107 |   |   |   | 3.68 | % |   |   | 17,344 |   |   |   | 158 |   |   |   | 3.69 | % |
| Total interest-bearing liabilities                                                                                                                                                                                                                                                                                              |   |               | 490,126 |   |               |   | 1,111 |   |   |   | 0.92 | % |   |   | 434,671 |   |   |   | 1,220 |   |   |   | 1.14 | % |
| Non-interest-bearing liabilities:                                                                                                                                                                                                                                                                                               |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing demand deposits                                                                                                                                                                                                                                                                                            |   |               | 178,124 |   |               |   |   |   |   |   |   |   |   |   | 174,520 |   |   |   |   |   |   |   |   |   |
| Accrued interest payable and other liabilities                                                                                                                                                                                                                                                                                  |   |               | 6,136   |   |               |   |   |   |   |   |   |   |   |   | 5,931 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                                                                                                                                                                                                                                                                               |   |               | 674,386 |   |               |   |   |   |   |   |   |   |   |   | 615,122 |   |   |   |   |   |   |   |   |   |
| Total stockholders’ equity                                                                                                                                                                                                                                                                                                |   |               | 77,258  |   |               |   |   |   |   |   |   |   |   |   | 62,864 |   |   |   |   |   |   |   |   |   |
| Total average liabilities and stockholders’ equity                                                                                                                                                                                                                                                                        |   | $                  | 751,644 |   |               |   |   |   |   |   |   |   |   | $ | 677,986 |   |   |   |   |   |   |   |   |   |
| Net interest income and net interest margin (3)                                                                                                                                                                                                                                                                                 |   |               |    |   |               | $      | 6,391 |   |   |   | 3.74 | % |   |   |   |   |   | $ | 7,223 |   |   |   | 4.89 | % |
|                                                                                                                                                                                                                                                                                                                            |   |               |    |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1. Average balances for loans include loans held-for-sale and non-accrual loans and are net of the allowance for loan losses, but non-accrual interest thereon is excluded.  Loan interest income includes loan fees of approximately $223 and $490 for the three months ended March 31, 2010 and 2009, respectively. |   |
| 2. Interest income and yields on tax-exempt securities are not presented on a taxable equivalent basis.                                                                                                                                                                                                                    |   |
| 3. Net interest margin is computed by dividing net interest income by total average interest-earning assets.                                                                                                                                                                                                               |   |

----

----

----

----

----

|                                         |   | Three     |   |   | Three     |   |
|----------------------------------------------|--------|-----------|--------|--------|-----------|--------|
|                                         |   | months    |   |   | months    |   |
|                                         |   | ended     |   |   | ended     |   |
|                                         |   | March 31, |   |   | March 31, |   |
|                                         |   | 2010      |   |   | 2009      |   |
| Other miscellaneous operating expenses       |   |      |   |   |      |   |
| FDIC assessments                             |   | $         | 285    |   |      | $      | 216 |   |
| Contributions                                |   |      | 25     |   |      |   | 19 |   |
| Legal fees                                   |   |      | 54     |   |      |   | 109 |   |
| Accounting and audit fees                    |   |      | 62     |   |      |   | 124 |   |
| Consulting fees                              |   |      | 53     |   |      |   | 52 |   |
| Postage expense                              |   |      | 86     |   |      |   | 98 |   |
| Telephone expense                            |   |      | 62     |   |      |   | 69 |   |
| Public relations                             |   |      | 37     |   |      |   | 38 |   |
| Training expense                             |   |      | 22     |   |      |   | 20 |   |
| Loan origination expense                     |   |      | 93     |   |      |   | 260 |   |
| Computer software depreciation               |   |      | 44     |   |      |   | 53 |   |
| Sundry losses                                |   |      | 46     |   |      |   | 60 |   |
| Loan collection expense                      |   |      | 133    |   |      |   | 106 |   |
| Other miscellaneous expense                  |   |      | 313    |   |      |   | 291 |   |
|                                         |   |      |   |   |      |   |   |   |
| Total other miscellaneous operating expenses |   | $         | 1,315  |   |      | $      | 1,515 |   |
|                                         |   |      |   |   |      |   |   |   |

----

|                         | (in thousands) |           |
|------------------------------|----------------|----------------|
|                         |           |           |   |   |   |   |
|                         |           | March 31, 2010 |   |   | December 31, 2009 |   |
|                         |           |           |   |   |   |   |
| Undisbursed loan commitments |           | $              | 190,873 |   |   | $ | 191,589 |   |
| Standby letters of credit    |           |           | 3,511 |   |   |   | 3,572 |   |
| Commitments to sell loans    |           |           | 1,661 |   |   |   | 3,179 |   |
|                         |           | $              | 196,045 |   |   | $ | 198,340 |   |

----

----

----

|                     |   | At March 31, 2010 |   |   | At December 31, 2009 |   |
|--------------------------|--------|-------------------|--------|--------|----------------------|--------|
|                     |   | Gross             |   |   | Guaranteed           |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars in thousands)   |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential mortgage     |   | $                 | 2,200  |   |                 | $      | — |   |   | $ | 2,200 |   |   | $ | 1,370 |   |   | $ | — |   |   | $ | 1,370 |   |
| Residential construction |   |              | 2,051  |   |                 |   | — |   |   |   | 2,051 |   |   |   | 3,413 |   |   |   | — |   |   |   | 3,413 |   |
| Commercial real estate   |   |              | 8,005  |   |                 |   | — |   |   |   | 8,005 |   |   |   | 5,669 |   |   |   | — |   |   |   | 5,669 |   |
| Agriculture              |   |              | 2,821  |   |                 |   | — |   |   |   | 2,821 |   |   |   | 3,188 |   |   |   | — |   |   |   | 3,188 |   |
| Commercial               |   |              | 3,141  |   |                 |   | 309 |   |   |   | 2,832 |   |   |   | 3,875 |   |   |   | 408 |   |   |   | 3,467 |   |
| Consumer                 |   |              | 299    |   |                 |   | — |   |   |   | 299 |   |   |   | 99 |   |   |   | — |   |   |   | 99 |   |
| Total non-accrual loans  |   | $                 | 18,516 |   |                 | $      | 235 |   |   | $ | 18,207 |   |   | $ | 17,614 |   |   | $ | 408 |   |   | $ | 17,206 |   |
|                     |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                        |   | At March 31, 2010 |    |   | At December 31, 2009 |   |
|-------------------------------------------------------------|--------|-------------------|---------|--------|----------------------|--------|
|                                                        |   | Gross             |    |   | Guaranteed           |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars in thousands)                                      |   |              |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |              |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual loans                                           |   | $                 | 18,516  |   |                 | $      | 309 |   |   | $ | 18,207 |   |   | $ | 17,614 |   |   | $ | 408 |   |   | $ | 17,206 |   |
| Loans 90 days past due and still accruing                   |   |              | — |   |                 |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                        |   |              |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans                                  |   |              | 18,516  |   |                 |   | 309 |   |   |   | 18,207 |   |   |   | 17,614 |   |   |   | 408 |   |   |   | 17,206 |   |
| Other real estate owned                                     |   |              | 4,262   |   |                 |   | — |   |   |   | 4,262 |   |   |   | 3,518 |   |   |   | — |   |   |   | 3,518 |   |
| Total non-performing assets                                 |   |              | 22,778  |   |                 |   | 309 |   |   |   | 22,469 |   |   |   | 21,132 |   |   |   | 408 |   |   |   | 20,724 |   |
|                                                        |   |              |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing loans to total loans                         |   |              |    |   |                 |   |   |   |   |   | 3.94 | % |   |   |   |   |   |   |   |   |   |   | 3.61 | % |
| Non-performing assets to total assets                       |   |              |    |   |                 |   |   |   |   |   | 3.00 | % |   |   |   |   |   |   |   |   |   |   | 2.77 | % |
| Allowance for loan and lease losses to non-performing loans |   |              |    |   |                 |   |   |   |   |   | 62.01 | % |   |   |   |   |   |   |   |   |   |   | 69.26 | % |
|                                                        |   |              |    |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Analysis of the Allowance for Loan Losses         |   |
|---------------------------------------------------|--------|
| (Amounts in thousands, except percentage amounts) |   |
|                                              |   |   |   |   |   |   |
|                                              |   | Three months endedMarch 31, |   |   | Year endedDecember 31, |   |
|                                              |   | 2010 |   |   | 2009 |   |   | 2009 |   |
|                                              |   |   |   |   |   |   |   |   |   |
| Balance at beginning of period                    |   | $ | 11,916 |   |   | $ | 14,435 |   |   | $ | 14,435 |   |
| Provision for loan losses                         |   |   | 1,450 |   |   |   | 1,106 |   |   |   | 10,489 |   |
| Loans charged-off:                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                        |   |   | (746 | ) |   |   | (251 | ) |   |   | (5,894 | ) |
| Agriculture                                       |   |   | (368 | ) |   |   | — |   |   |   | (5,043 | ) |
| Real estate mortgage                              |   |   | (603 | ) |   |   | — |   |   |   | (272 | ) |
| Real estate construction                          |   |   | (345 | ) |   |   | (1,235 | ) |   |   | (2,742 | ) |
| Consumer loans to individuals                     |   |   | (54 | ) |   |   | (84 | ) |   |   | (342 | ) |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total charged-off                                 |   |   | (2,116 | ) |   |   | (1,570 | ) |   |   | (14,293 | ) |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                        |   |   | 2 |   |   |   | 6 |   |   |   | 322 |   |
| Agriculture                                       |   |   | — |   |   |   | — |   |   |   | 5 |   |
| Real estate mortgage                              |   |   | — |   |   |   | — |   |   |   | 2 |   |
| Real estate construction                          |   |   | 6 |   |   |   | 425 |   |   |   | 725 |   |
| Consumer loans to individuals                     |   |   | 53 |   |   |   | 61 |   |   |   | 231 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total recoveries                                  |   |   | 61 |   |   |   | 492 |   |   |   | 1,285 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net charge-offs                                   |   |   | (2,055 | ) |   |   | (1,078 | ) |   |   | (13,008 | ) |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period                          |   | $ | 11,311 |   |   | $ | 14,463 |   |   | $ | 11,916 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of net charge-offs                          |   |   |   |   |   |   |   |   |   |   |   |   |
| To average loans outstanding during the period    |   |   | (0.43 | %) |   |   | (0.21 | %) |   |   | (2.65 | %) |
| Allowance for loan losses                         |   |   |   |   |   |   |   |   |   |   |   |   |
| To total loans at the end of the period           |   |   | 2.45 | % |   |   | 2.92 | % |   |   | 2.45 | % |
| To non-performing loans at the end of the period  |   |   | 61.08 | % |   |   | 73.21 | % |   |   | 67.65 | % |

----

|                        |   | (in thousands) |   |
|-----------------------------|--------|----------------|--------|
|                        |   | March 31, 2010 |   |   |   December 31, 2009 |   |
| Three months or less        |   | $              | 28,129 |   |   | $ | 35,722 |   |
| Over three to twelve months |   |           | 50,352 |   |   |   | 47,616 |   |
| Over twelve months          |   |           | 14,519 |   |   |   | 13,711 |   |
| Total                       |   | $              | 93,000 |   |   | $ | 97,049 |   |

|              |   | (amounts in thousands except percentage amounts) |   |
|-------------------|--------|--------------------------------------------------|--------|
|              |   | Actual                                           |   |   | Adequately |   |   | Well Capitalized |   |
|              |   |                                             |   |   |   |   |   | Capitalized |   |   | Ratio |   |
|              |   | Capital                                          |   |   | Ratio |   |   | Ratio |   |   | Requirement |   |
| Leverage          |   | $                                                | 73,813 |   |   |   | 9.86 | % |   |   | 4.0 | % |   |   | 5.0 | % |
| Tier 1 Risk-Based |   | $                                                | 73,813 |   |   |   | 14.93 | % |   |   | 4.0 | % |   |   | 6.0 | % |
| Total Risk-Based  |   | $                                                | 80,069 |   |   |   | 16.19 | % |   |   | 8.0 | % |   |   | 10.0 | % |

----

| ExhibitNumber | Exhibit                                                                                                                                              |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                 |
| 31.1          | Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                               |
| 31.2          | Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                               |
| 32.1          | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuantto Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2          | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuantto Section 906 of the Sarbanes-Oxley Act of 2002 |

|   |         |   | FIRST NORTHERN COMMUNITY BANCORP                                         |
|--------|--------------|--------|--------------------------------------------------------------------------|
|   |         |   |                                                                     |
| Date:  | May 14, 2010 | By:    | /s/  Louise A. Walker                                          |
|   |         |   |                                                                     |
|   |         |   | Louise A. Walker, Sr. Executive Vice President / Chief Financial Officer |
|   |         |   | (Principal Financial Officer and Duly Authorized Officer)                |